Overview
Toyota Pakistan announced another production pause. The back-to-back cut-off production plant is caused by dwindling economic graphs and import curbs. Economic factors are linked with the automobile industry, and unstable economic conditions hitting a hard to the automobile industry.
Import curbs by the State Bank of Pakistan (SBP) on the CKD kits caused a setback in vehicle production. Previously, Toyota cited the reason for low production due to the non-availability of stock (CKD kits). Not only Toyota but many others cited the same reason for halted production plants for several days. It has also caused multiple job losses in recent times. car makers observe several non-productive days in recent months and are not able to pay wages accordingly.
Toyota Pakistan Notice
Toyota Pakistan announced a second cut-off production in this first quarter of the year. As per the Toyota Indus Motor Corporation notification company will remain closed from March 24, 2023, to March 27, 2023. Meanwhile, from March 28, 2023, Toyota will resume production with single-shift working staff. This is because of the short stock availability.
The earlier notification of Toyota clearly mentioned the delay in LCs approval by SBP disturbs the overall production environment. The delay in vehicle delivery is also due to the shortage of stock.
Additional 25% GST
Recently the government has imposed 25% GST on luxury items and 1400cc and above cars are included in it. After the announcement of additional 25% GST car makers increased prices according o it but it makes a huge difference from old prices and affects the new sale of cars.
Car makers continuously increase prices due to several reasons, rupee devaluation, import duties, and ne taxes announced by the government. The conclusion of all these automakers increased prices to manage costs and buyers can’t afford the high prices. Both affect the sale of vehicles.
Conclusion
The down automotive phase makes several laborers unemployed. The continuous increase in car prices makes car sales down and automakers have already faced a shortage of stock. The automotive industry really needs the support of the government to continue operations and fulfill sales goals.
